Jamie Dimon Goes On The Attack On Bitcoin

The fact that we're still talking about Bitcoin seems to suggest that it has some staying power.

However, Jamie Dimon believes its standing as a currency will eventually end.

Dimon, who is the CEO of JP Morgan, spoke with CNBC's Andrew Ross Sorkin about the so-called digital cryptocurrency. And he went on the attack.

"It's a terrible store of value," said Dimon. "It could be replicated over and over."

That speaks to the logistical issues.

But what's worse is arguably the regulatory hurdles.

"It doesn't have the standing of a government," added Dimon. "And honestly, a lot of it — what I've read from you guys — a lot of it is being used for elicit purposes. And people who will get upset with it is governments. Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it's almost impossible to do with something like that."

However, Dimon doesn't think Bitcoin will go away altogether.

"They will eventually be made as a payment system to follow the same standards as the other payment systems and that will be probably be the end of them," he said.

This is coming from someone who is arguably one of the most powerful bankers in the world.

Bitcoin enthusiasts like to present it as a “power to the people” form of money, stressing its apparent lack of ownership (the “Napster for finance“). They stress the lack of need for a “trusted party” like a bank or broker to verify that a payment has been made. And many clearly relish the idea of launching a currency outside the control of central banks (plus this beats Cryptonomicon in geekery).

If you believe the hype, you’ve been had. As Izabella Kaminska of the Financial Times tells us, you all are really just doing free/underpaid R&D for central banks, since you are debugging and building legitimacy for one of their fond projects, making currencies digital and getting rid of cash altogether.

I had wondered about the complacency of Fed and SEC officials in Senate Banking Committee hearings on Bitcoin last year. Press reports at the time attributed it to successful lobbying. But there’s no need to fight when you understand how to become the alpha quant per Tom Lehrer:

Plagiarize,
Let no one else’s work evade your eyes,
Remember why the good lord made your eyes,
So don’t shade your eyes,
But plagiarize, plagiarize, plagiarize -
Only be sure always to call it please ‘research’.

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…

Bitcoin has helped to de-stigmatise the concept of a cashless society by generating the perception that digital cash can be as private and anonymous as good old fashioned banknotes. It’s also provided a useful test-run of a digital system that can now be adopted universally by almost any pre-existing value system.

This is important because, in the current economic climate, the introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

Consequently, anyone who believes Bitcoin is a threat to fiat currency misunderstands the economic context. Above all, they fail to understand that had central banks had the means to deploy e-money earlier on, the crisis could have been much more successfully dealt with.

Among the key factors that prevented them from doing so were very probable public hostility to any attempt to ban outright cash, the difficulty of implementing and explaining such a transition to the public, the inability to test-run the system before it was deployed.

Last and not least, they would have been concerned about displacing conventional banks from their traditional deposit-taking role, and in so doing inadvertently worsening the liquidity crisis and financial panic before improving it…

Almost of all of these prohibitive factors have, however, by now been overcome:

1) Digital currency now follows in the footsteps of a “disruptive” anti-establishment digital movement perceived to be highly accommodating to the black market and all those who would ordinarily have feared an outright cash ban. This makes it exponentially easier to roll out. Bitcoin has done the bulk of the educating.

2) What was once viewed as a potentially oppressive government conspiracy to rid the public of its privacy can be communicated as being progressive and innovative as a result.

3) Banks have been given more than five years to prove their economic worth and have failed to do so. If they haven’t done so by now, they probably never will, meaning there’s unlikely to be a huge economic penalty associated with undermining them on the deposit front or in transforming them slowly into fully-funded fund managers.

4) The open-ledger system which solves the digital double-spending problem has been robustly tested. Flaws, weaknesses and bugs have been understood, accounted for, and resolved.

The balance of the article describes how the central bank digital currency would be launched, and Kazmina finds a plan developed by Miles Kimball of the University of Michigan to be thorough and viable.

…the greater the negative interest rate, the greater the incentive to hold alternative coins. The greater the incentive to hold alternative coins ,the greater the incentive to produce them. The greater the incentive to produce them, the greater the chances of oversupply and collapse. The more sizeable the collapse, the more desirable the managed official e-money system ultimately becomes in comparison.

Either way, the key point with official e-money is that the hoarding incentives which would be generated by a negative interest rate policy can in this way be directed to private asset markets (which are not state guaranteed, and thus not safe for investors) rather than to state-guaranteed banknotes, which are guaranteed and preferable to anything negative yielding or risky (in a way that undermines the stimulative effects of negative interest rate policy).

So all these tales by Silicon Valley promoters (and remember, Marc Andressen mentioned all the money chasing Bitcoin-related ventures) of how liberating and democratic Bitcoin will be are almost certain to prove to be precisely the reverse. Hang onto your real world wallet.

Leaked Emails From Google Suggest it is Considering Bitcoin Integration

It never hurts to ask: That was the philosophy behind bitcoin advocate and bitcoin classifieds siteCoinList.me developer Jarar Malik’s decision to email the heads of the biggest tech powerhouses in the world – Apple, Amazon and Google – and inquire as to their stance on bitcoin this week.

This much can be seen in Malik’s earnest emails to top tech leaders in which he says “there’s nothing extraordinary” about himself, other than his willingness to go the extra mile to find out how these industry leaders view the emerging currency.

When none of the top brass answered, Malik says he remained undeterred, choosing to go “down the ladder” from Google CEO Larry Page to query Google vice president Vic Gundotra.

“As we continue to work on Google Wallet, we’re grateful for a very wide range of suggestions. While we’re keen to actively engage with Wallet users to help inform and shape the product, there’s no change to our position: we have no current plans regarding Bitcoin,” a Google spokesperson told CoinDesk.

The result is the bitcoin community is left with two possibilities: 1. Google is at least open to considering using bitcoin or 2. Google executives misstated their positions on bitcoin.

Malik reacts to the news

Google’s public statements stunned Malik, who insists he did not doctor the emails and had no incentive to do so.

Malik noted that he spoke to Google representatives after they were made aware of his Reddit posts, and that they subsequently asked him to moderate a Google survey that would ask “What would I want Google to do with bitcoin?“

“Ariel Bardin, Vice President of Payments @ Google has asked me to facilitate a Google Moderator and pose the question ‘What would I want Google to do with bitcoin?’. He’s promised me he will personally review the results and pass it on,” Malik wrote on reddit.

In emails to Malik obtained by CoinDesk, Bardin indicated that he was not able to comment on the company’s plans for bitcoin.

At press time, more than 1,600 people had given Google over 500 suggestions with 20,000 votes, including novel ideas like adding a bitcoin tip jar to YouTube, an addition that would incorporate aspects of YouTube’s competitors like Patreon.

Google’s response

Malik contends that the emails he received are real, and that Google is taking the possibility of working with bitcoin seriously. But, he believes the attention his posts received likely caused the company to revert back to its previously stated policies.

“I think a couple things happened. He probably gets a thousand of emails a day from people bitching about how their email doesn’t work and shit like that, he probably spoke off the cuff.

Those were his exact words, I didn’t add anything. All I did was black out my name. That’s why I was like what the fuck man, people can be nasty.”

Malik was further frustrated by Reddit users who allege that his intentions were to manipulate the price of bitcoin.

“I can understand the natural inclination for people to call bullshit. I posted screenshots, and yeah, screenshots can be faked, but this one Google spokesman, they’re just playing it safe.

If Google is not going to do something bitcoin related, or if they’re going take an anti-bitcoin stance or come up with a rival product, certainly none of these guys would have responded to me.”

Google refused to comment on whether the emails were legitimate, however, the company did not denounce them either. Company representatives rather directed us to a CNBC story on bitcoin from last October, suggesting its stance on the virtual currency remains, publicly at least, unchanged.

Sweden Likely to Regulate Bitcoin as an Asset

An official from the Swedish Tax Agency has revealed it is drafting rules for bitcoin users and programmers that would treat bitcoins as assets.

In an interview with Bloombergreleased 22nd January, Swedish tax official Olof Wallin spoke about the proposal, stating why he believes bitcoin fails to meet Sweden’s definition of a currency:

“Currencies are traditionally tied to a central bank or geographic area,” Wallin stated.

Because of this distinction, Wallin said Sweden is likely to regulate bitcoin “like art or antiques”. Under the proposal, bitcoin would fall under the same asset class as antiques, copyrights, jewelry and stamps, and be subject to capital gains taxes.

Wallin stated that Sweden is also considering whether to tax bitcoin miners as businesses, stating only that his agency is considering its position on the matter.

The unconventional classification divided Bitcoin Talk forum commentators, with some finding it to be a level-headed approach, while others struggled to digest the comparison between bitcoin and creative works of value.

Regardless, with the announcement, Sweden becomes the latest Nordic country to update the world on how it is seeking to oversee virtual currencies.

On 20th January, the Bank of Finland took similar action, moving to classify bitcoin as a “commodity”, indicating that lawmakers across the Nordic region are working fast to set domestic precedents for virtual currencies.

Seen in concert with past announcement, though, the proposal can be viewed as a positive for bitcoin. Just last April, Sweden warned its citizens against using bitcoin, choosing to focus its statements on bitcoin’s uses in money laundering.

However, comments from Sweden’s Financial Markets Minister Peter Norman suggest this viewpoint is still common among the country’s regulators:

“If we end up with artificial or virtual currencies, there is a risk that they could slip through the cracks and that would be serious. I don’t think Bitcoins are at that stage today, but if they were to grow into a big virtual currency that’s being used a lot, that would result in risks that we don’t want,” Norman told Bloomberg.

Jonathan Fors, a bitcoin researcher and Ph. D. student at Linköping University sees the announcement differently, arguing that Sweden should classify bitcoin as a “foreign currency”.

“In my opinion, classifying digital currencies as assets could hinder adoption here in Sweden. Digital currencies have many promises in store for the future, and I think the Swedish government should think carefully before placing such restrictions on this technology,” Fors said.

Regional consensus

Despite differences in how regulation could take shape in Finland and Sweden, the Nordic nations do have a commonality: They agree that bitcoin should not be treated as a currency.

In December, Norway’s director general of taxation stated that bitcoin does not “fall under the usual definition of money or currency“. Finland went one step further, suggesting that in addition to failing the definition of a currency, bitcoin does not qualify as a payment instrument under Finnish law.

The decision could also impact ongoing discussions in major markets like the United States and United Kingdom, which have still yet to declare how bitcoin will be taxed.

Since 2006, Sweden has seen steady economic growth after decades of economic struggles. As such, it has emerged as a country with what some consider is a proven model for steady economic growth at a time when other nations are struggling with debt and unemployment.

Microsoft Destroys Bitcoin Mining Botnet Sefnit

Microsoft has gone on the offensive against the ‘Sefnit’ botnet and it has remotely removed an older version of the Tor Browser from an estimated two million computers.

Sefnit is a curious form of Tor-based malware that managed to infect millions of computers and turn them into zombies for click fraud andbitcoin mining.

It was first detected last summer, after the Tor Project noticed a 600% increase in Tor use. The spike coincided with the highly publicised revelations about NSA’s snooping programmes, namely Prism.

However, privacy concerns and paranoia had nothing to do with the surge. In September it became evident that the cause of the massive increase in Tor users had nothing to do with the NSA and whistleblower Edward Snowden: the culprit was Sefnit.

Remote solution

Sefnit was propagated in several ways, and it quickly found its way to several software bundles – complete with a vulnerable version of the Tor Browser. Themalware installed the Tor client in the background, and even when Sefnit was removed the infected computer would still connect to the Tor network.

Since Microsoft had no way of reaching the affected users, it decided to wipe the infections remotely, reports Hacker News. Microsoft updated definitions for its anti-malware suites and the new signatures allowed Microsoft Security Essentials, Windows Defender, Microsoft Safety Scanner and other tools to detect and remove Sefnit malware.

Bitcoin mining botnets have been around for a while. The most recent case of mining malware propagation involved Yahoo’s European servers, which served infected ads for a few days before the company identified the breach. Several mining botnets were identified and put out of action in late 2013.

Rising hash difficulty

However, bitcoin mining botnets are starting to look like dinosaurs. PCs have not been used for bitcoin mining for months and even a huge botnet is an extremely inefficient way of mining. As the hash difficulty goes up, returns go down. In other words, malware designers will simply stop bothering with bitcoin mining malware altogether.

There is a problem though. Some PCs can still mine Scypt-based currenciesquite efficiently. If litecoins or other altcoins based on ASIC-proof algorithms ever become popular, they could present a tempting target for cyber criminals.

Cryptocurrency Exchange CoinMKT Announces US Banking Partner

Los Angeles bitcoin exchange CoinMKT has announced a US-based banking partner. As a result, the company is now able to accept bank wires from US bank accounts.

Travis Skweres, CEO of CoinMKT, says he expects the company to grow as a result.

“We’re confident our growth will explode being able to accept wires deposits that can be credited same day or next day,” he said.

Not many exchanges currently have the ability to accept banking wires, and the ones that do have experienced massive user expansion. Exchanges that have the ability to link directly to the US dollar via a banking institution are more attractive to investors. Skweres told CoinDesk that his company has added staff in order to meet the expected demand.

“We have 8 employees now, so we have hired to enhance customer support as well as accelerate feature development.”

The company is also announcing the addition of three more altcoins to its exchange: Megacoin (MEC), Worldcoin (WDC) and Quark Coin (QRK). Terracoin (TRC), which CoinMKT is now referring to as “problem plagued”, is being removed.

As a result, CoinMKT users can now trade between USD and nine cryptocurrencies in total. All of them are listed here, with informational resources for each. Additionally, users now have the ability to trade bitcoin for each of the eight altcoins. For example, there is a BTC/LTC pair for bitcoin/litecoin and a BTC/FTC pair for bitcoin/feathercoin trading.

Maker-taker structure

The company is also switching its commission structure to a ‘maker-taker’ setup. This adds an incentive for market makers, those who are selling a cryptocurrency on a particular market.

Essentially, it helps to better fill an order book, something that BTC China has already implemented. That exchange has seen impressive volume gains, which may partially be attributed to its maker-taker structure. Skweres observed:

“This is a popular method in many FOREX (foreign exchange) platforms, and it’s being experimented with in crypto, you’re basically paying market makers to trade instead of charging them.”

Larry Harris, a professor at the USC Marshall School of Business, recently wrote a paper entitled ‘Maker-Taker Pricing Effects on Market Quotations’. In his abstract, he writes that his research found ”the exchange maker-taker pricing scheme affects incentives to take or make markets resulting in narrower bid-ask spreads”.

The more narrow the spread is, the more liquidity that exists in an exchange as buyers and sellers are closer to bid and ask amounts.

That’s good for cryptocurrency trading, since there’s a general lack of that attribute in many exchanges. CoinMKT’s new maker-taker commission structure means that the maker is rewarded 0.25%; the taker is charged 0.75%. CoinMKT also takes 0.5% as part of its fee.

Maker-taker aside, the US banking partnership is clearly the most significant of the company’s announcements. Yet there are also many other options available for CoinMKT deposit and withdrawals, according to Skweres.

“US customers now have the option of wire or money order. Foreign customers have wire, money order, OKPay or Egopay as choices,” he said.

Las Vegas Casinos Accept Bitcoin, But Not for Gambling

The D Las Vegas Casino Hotel and Golden Gate Hotel & Casino have announced they will become the first hotels in Las Vegas to directly accept bitcoin for purchases.

Notably, acceptance will be limited to certain sections of the hotels, including the Golden Gate’sfront desk and the D’s front desk, gift shop and on-site restaurants American Coney Island and Andiamo Steakhouse. However, bitcoin will not be an accepted payment method on the casino floor, Derek Stevens, co-owner and CEO of the D and Golden Gate, told CoinDesk, due to ongoing concerns from state regulators.

Golden Gate is primarily owned by Desert Rock Enterprises, an investment company led by Derek and Greg Stevens. The brothers are also co-owners of the D. From 22nd January, both properties will use the services of Georgia-based payment processor BitPay to handle transactions via tablet and mobile devices. Stevens said his company elected to use BitPay due to its ease-of-use.

Though patrons will be barred from bitcoin gambling, Stevens indicated that he believes his hotels have much to offer the currency’s dedicated user base.

“I’m hoping the early adopter element provides us an opportunity to meet what I consider to be an interesting and intelligent demographic.”

Davis went on to suggest the decision to accept bitcoin would also appeal to Vegas residents who have relocated to the city due to its growing status as a technology hub.

A big step for bitcoin

While bitcoin gambling services have long been a staple on the Internet, the decision by Golden Gate and the D puts real-life bitcoin gambling one step closer to reality, even if this milestone is still far off. Stevens indicated that Nevada’s gaming regulation bodies remain wary of bitcoin and what it could mean for the city’s businesses.

“I don’t think the [State] Gaming Control Board or [the Nevada] Gaming Commission would be prepared to deal with bitcoin at this point. But I do know that the Gaming Commission and Gaming Control Board have bitcoin on the radar, and are trying to evaluate what their future plans will be.”

“I do think that from the Gaming Commission’s perspective that there’s some greater interest in understanding with some better clarity where the US Treasury and the IRS falls on this before it makes a determination on whether bitcoin can be used in casino cages to purchase casino chips or to purchase slot play,” he added.

However, while notable, the D and Golden Gate are not located on the infamous Las Vegas strip, signaling that despite an increased interest from the area’s hotels, bitcoin has not yet cracked mainstream acceptance in Vegas.

Built in 1906, Golden Gate was one of the first hotels erected on Las Vegas’ famous Freemont Street. Today, the area is known affectionately as “Old Vegas,” and it draws more interest for its historic ambience than its nightlife.

This appeal is evidenced by advertising for properties such as the D, which is marketed to customers in the Great Lakes region of Ohio, Illinois, Indiana, Michigan and Wisconsin, whereas major nightlife destinations such as The Cosmopolitan frequently advertise nationally in major metropolitan areas.

Top bitcoin attraction

In addition to hosting the annual Inside Bitcoins conference, Las Vegas has nurtured a thriving bitcoin community, complete with a number of local merchants and retail outlets accepting the currency.

Rumours that major hotels were considering accepting bitcoin began surfacing last year, however, sources told CoinDesk that issues with the local gaming commission may have hampered these early initiatives.

Stevens reported that the pressure may be on at many hotels, however, as he stated that the number of customers inquiring about bitcoin acceptance at his properties helped sway his decision to become involved in the movement:

“I think if you look at the last 10 days with bitcoin, you have some pretty substantial announcements. You have an NBA franchise that makes an announcement, Overstock makes an announcement and now you throw us into it, I think it’s definitely something that will continue to grow.”

If you’re planning to spend your bitcoins in Vegas following the news, click herefor our complete guide to everything bitcoin in Las Vegas.

OKPAY Makes U-Turn on GBP to Bitcoin Transfers

Web payments service OKPAY has announced that it will allow users to move pound sterling (GBP) into OKPAY web-based wallet accounts and then transfer these funds to cryptocurrency exchanges.

Rumours of the policy change by the merchant and consumer payment provider first surfaced onreddit and Bitcoin Talk after customers received emails. The announcement was later confirmed on 21st January via OKPAY’s official Twitter account:

The company’s email announcement suggests it made the move after changing its banking provider.

“New bank does not have any restrictions regarding the further usage of funds on crypto-currency markets. Please feel free to fund your account using the updated banking details and use the money without any limitations,” the email read.

Based in the British Virgin Islands, OKPAY bowed to pressure and cut its services to electronic currency exchanges back in May 2013. At the time, OKPAY cited the “risks” and “potential dangers” posed by anti-money laundering laws as the primary driver of the decision.

While limited to GBP, the move is indicative of OKPAY’s shifting stance on bitcoin. The payment services provider has historically been adamant about its support for emerging virtual currencies: in November the company added support for litecoin payments. OKPAY’s Konstantin Romanovsky said:

“The UK bank that we used before did not make a final decision on whether to handle transactions in favour of crypto-currencies or not. Therefore the compliance department of the bank asked us to restrict such transfers.”

“As of now we decided not to wait for the final decision and switched to alternative bank which does not have limitations of that matter,” he added.

Still, despite the decision, OKPAY was firm in its support for virtual currencies. The company wrote in April 2013:

“In many respects it breaks our heart to have taken this step (we’re a firm that champions financial innovation after all), but we know our banking providers are not comfortable with bitcoin and want payments to these firms restricted.”

“This is happening everywhere – notably Bitfloor and Bitcoin-24 shut themselves down recently. The banks – just like everyone else in the sector – are nervous because they don’t know what to think of Bitcoin. The regulators and politicians’ silence on the topic leaves us all in the dark,” the statement added.

OKPAY’s policy shift comes just months after it stipulated that GBP users check a box, verifying that their funds would not be spent on cryptocurrency, a feature that further incited users.

User frustrations

Due to its long history of policy changes, frustrations have become an accepted, albeit maligned, part of OKPAY’s service. Some reddit users have gone as far as to boycott the company, while others place the blame on the major banks OKPAY use, alongside its financial services provider Mayzus Financial. Reddit usermkellerman wrote:

“OKPAY are quite paranoid about AML and another problem is that their support people seem to be very bad at English, so their replies are often hard to understand. Their support are also slow [sic]. However in my experience they are an honest company.”

OKPAY emerged as a popular way for bitcoin buyers to move fiat currency into the Bulgarian-based bitcoin exchange BTC-e, and it remains unclear whether this policy shift will restore both cryptocurrency deposits and withdrawals.

Bylls Lets Canadians Pay Bills in Bitcoin

Canadian government officials may not think that bitcoin is legal tender, but thanks to a new startup, you can still pay your taxes in it – along with a lot of other bills. Canadian firm Byllshas become one of the first to offer bill payment in bitcoins. The service, only available in Canada at present, enables users to pay around 6,000 Canadian organisations – including the government – in bitcoins, by handling the fiat conversion for you.

Started by Eric Spano, Bylls was incubated at the Bitcoin Embassy, a bitcoin education and advocacy group in a 14,000 square-foot building in Montreal. The Embassy also recently became the Canadian affiliate chapter for the Bitcoin Foundation.

This isn’t Spano’s first rodeo. He has a background in finance, and originally founded a local bitcoin trading website called Northland Bitcoins. Canadian bank RBC closed that site’s bank account, around the same time that it closed the account for Canadian bitcoin exchange Virtex. But instead of being discouraged, Spano searched for a new business model.

“That fed the fuel for the next idea which was Bylls. There are places to buy things with bitcoin, but what if you’re the average person with phone and credit card bills to pay, or you want to pay the rent?” he asks.

Most large utilities aren’t equipped for bitcoin, which is irritating for miners or enthusiasts holding coins. “I figured why not take advantage of the financial system that already exists and enable them to interface together?”

He’s talking about the Canadian online banking system, which is already set up to process fiat payments to a large database of established payees. Most banks in Canada have a ‘pay bills’ area, enabling customers to select everything from municipal governments to pay their property tax, through to their phone bills. And the Canadian Revenue Agency is a payee.

“The online system does allow users to pay their taxes (federal, most provinces and some municipalities), so yes technically taxes can be paid with Bitcoin,” Spano confirms.

Strictly speaking, you actually pay Bylls in bitcoin. You then provide it with your account information for the relevant payee. It sells the bitcoins at the market rate on Canadian exchange Virtex, and settles the payments itself in fiat currency, via a payment processor.

Fees and limits

Opening up 6,000 companies in Canada for bitcoin payments is quite a leap. For those payees not listed, Spano urges his customers to simply pay on their credit card, and then just pay the card off in bitcoin at the end of the month.

Users can pay up to $1000 in bills per month if unverified, or $5000 if they verify using the miiCard system. The fee structure starts at $3 for smaller bills, and progresses up to $6 for bills between $150 and $499. After that, Bylls charges 1%. Spano is also considering a subscription-based model.

The one missing link here is recurring bill payments, which would be useful for people with regular monthly payment plans, say, for their rent, gas or electricity bills. Those people will have to remember to conduct payments manually, admits Spano.

In other news, Canadian bitcoin exchange Vault of Satoshi is trialling its own integration with the Canadian bills payment system. Rather than allowing people to pay their bills from their Vault of Satoshi account, however, it will allow customers to send money to the exchange, once verified, enabling them to load their accounts from the bank. The firm is also beta testing a pre-authorised debit service.”

“We are able to use bill payments with the top six banks, and with pre-authorised debit we cover every bank in Canada including credit unions,” said VoS founder Michael Curry.

University of Cumbria First in UK to Accept Bitcoin

A university in the UK has announced that it will accept bitcoin payments for two new programmes linked to the study of cryptocurrencies and complementary currencies.

The courses are run by the Institute for Leadership and Sustainability at the University of Cumbria. The institute’s director, Jem Bendell said:

“We are accepting bitcoin as a way of experimenting [with] how it works for a major organisation with many departments.”

The two programmes run by the institute are a certificate in sustainable exchange and a post-graduate certificate in sustainable leadership. The first is taught at the university’s London campus and will begin in July; the second is taught at its Lake District campus and will begin in June.

The university’s head office is in Carlisle in the north of England. It has nine campuses and accepts roughly 10,500 students each year. It is known for its teacher training programmes and outdoor study degrees.

The institute has a history of involvement with alternative currency research. Last May it was one of seven partners that helped organise a United Nations symposium (PDF) on alternative finance and complementary currencies. It also has a research programme on the topic that includes PhD students.

‘Complementary currencies’ is a term used to describe forms of money that supplement a national currency. It is often used interchangably with ‘alternative currency’, however the term’s exact definition is the subject of an ongoingacademic debate.

In a press release announcing the move, the university claimed that it is the world’s first public university to accept bitcoin for tuition fees. It also noted that it is the first British university and the first business school to do so. When asked if the move to accept bitcoin for tuition was simply a savvy marketing move to generate publicity for the university, Bendell said:

“Certificates generally don’t generate media attention. The acceptance of bitcoin will generate interest. However, it’s a normal thing for us to do, as we believe our teaching should be informed by our experiences.”

The certificate in sustainable exchange will teach students how to “create, scale and evaluate digitally-enabled systems of sustainable exchange”. Students will also explore the link between these systems and the emerging “sharing economy”, which includes systems like Airbnb, according to the course description. The programme is classified as a “short course” by the university. The certificate costs £1,111.

The post-graduate certificate in sustainable leadership is a year-long course where students will be asked to challenge “orthodoxies in corporate social responsibility and environmental management”. Students on the course will be able to learn about sustainable exchange in an elective module. This certificate costs £3,333.

However, the university warned prospective students against buying bitcoin to pay for tuition in its press release. It said that students should only pay in bitcoin if they already owned the cryptocurrency or if they received bitcoin donations – due to the currency’s volatility risk. The institution plans to convert bitcoin payments to pounds sterling at the time of payment via BitPay, thus reducing its own exposure to the digital currency’s price volatility.

Bitcoin Classified ‘Commodity’ by Finland Central Bank

Bitcoin has been classified as a commodity in Finland after the Scandinavian country’s central bank declared that it did not meet the definition of a currency.

The Bank of Finland concluded that bitcoin simply doesn’t meet the legal conditions required to be considered a form of electronic payment, either.

Paeivi Heikkinen, head of oversight at the bank, told Bloomberg that bitcoin was more comparable to a commodity at this point.

“Considering the definition of an official currency as set out in law, it’s not that. It’s also not a payment instrument, because the law stipulates that a payment instrument must have an issuer responsible for its operation,” Heikkinen said.

Finland open to digital currency

Unlike some countries, Finland has so far embraced a more liberal attitude towards digital currencies. In addition, these currencies are remarkably popular in certain circles.

A recent survey carried out by Nordnet AB found that one in ten Finns is interested in investing in digital currencies. Among men interest was a bit higher, with 17.2% of those questioned saying they would consider investing in bitcoin. The country is also home to one of Europe’s first permanently installed bitcoin ATMs.

This latest statement is unlikely to change very much. Finns will still be able to exchange bitcoins and make investments. However, Heikkinen warns that nobody guarantees the value of bitcoin and huge fluctuations are commonplace. He notes: “It’s at your own risk.”

Regulation may prove necessary

“The changes in value are totally unregulated and very vulnerable to news, speculation and hoaxes. If the phenomenon grows and begins to cause side effects, officials will then have to consider whether to regulate it and how,” he said.

Heikkenen raises an interesting point. For the time being there is simply not a lot of need for regulation, as the bitcoin economy is relatively small. Some regulators like the Chinese central bank have clearly stated that bitcoin does not pose a threat to fiscal or monetary stability.

However, with greater adoption it is only logical to expect more calls for some form of regulation. While speculators might not like it, a sound regulatory framework that would eliminate many ambiguities related to digital currencies could actually boost bitcoin adoption worldwide.

"A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers. Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it. On the other hand, technologists — nerds — are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it. Eventually mainstream products, companies, and industries emerge to commercialize it; its effects become profound; and later, many people wonder why its powerful promise wasn’t more obvious from the start. What technology am I talking about? Personal computers in 1975, the Internet in 1993, and — I believe — Bitcoin in 2014."